Universal credit in danger of failing, official Whitehall review says

Major Projects Authority’s performance report on 170 most expensive projects gives flagship scheme same ‘amber-red’ status as Crossrail and HS2

The first official government admission that Iain Duncan Smith‘s flagship plans to remake the welfare state has hit trouble emerged on Friday night when the Cabinet Office‘s review of all major Whitehall projects branded the universal credit programmeas having fallen into “amber-red” status, a category designating a project in danger of failing.

The revelation came as the government for the first time time published the performance of its 170 most expensive and important projects, collectively worth over £350bn. Data has been exempted from only 21 projects in the review by the Major Projects Authority (MPA), where disclosure would damage commercial interests or national security.

Crossrail and HS2, the cross-London and north-south high-speed rail links, have the same amber-red status – as does the Department for Work and Pension’s fraud and error programme, its single-tier state pension reform and its plans to introduce personal independence payments.

Publication led to fierce infighting in Whitehall as government departments disputed their listings and fought to prevent publication. In total eight projects are rated red, 23 are amber-red, 32 are green, 49 amber-green and 58 amber.

The Cabinet Office hailed the publication, saying the MPA’s annual report overturns Whitehall secrecy and will help further improve project delivery. The MPA, acting on behalf of taxpayers, has powers to intervene on failing projects, and its boss David Pitchford admitted civil service control of the projects had not been great.

However, an MPA rating of amber-red will anger the DWP, which has insisted that universal credit is on time and on budget. A soft launch of the scheme started a month ago, but the amber-red rating will raise questions as to whether it will comply with its timetable.

A DWP spokesperson claimed the rating was out of date, but the government said last September that the scheme was on track – an assertion that is now challenged by this MPA report.

The DWP said: “This rating reflects where the project was eight months ago rather than now. Since this September 2012 assessment, the universal credit pathfinder has successfully launched and David Pitchford – the government’s leading expert in major projects – has put in place a strengthened plan and leadership team. We are on course to begin the national rollout of universal credit in October 2013.”

The DWP added “these updates are all part of responsible project management – helping us spot risks in advance and then deal with them. We have used the ongoing MPA reviews to inform our planning as we go”.

Underlining the importance of UC, the MPA said: “Universal credit provides a new single system of means-tested support for working-age people who are in or out of work. It aims to reduce the number of workless households by reducing the financial and administrative barriers to work that exist in the current system of benefits and tax credits, and replacing the complexity of the income-related benefits system with a single payment which supports people to find work, find more work, and find better paid work.”

Francis Maude, the Cabinet Office minister, was unrepentant about publication of the progress report, saying: “Major projects need scrutiny and support if we are to succeed in the global race. Publishing this report will transform the management of expensive, important projects and will help hold Whitehall to account.

“I was staggered when I came into government and found a relaxed approach to managing projects worth hundreds of billions of pounds. Problems were swept under the carpet where they festered at the taxpayers’ expense. In many places the civil service lacked project management skills and had a lamentable record of project delivery.

“Since the general election we have got things back on track and are equipping the civil servants with the skills they need. Our new Major Projects Authority has helped save over £1.7bn – that’s £100 per working household. There’s much more to do but thanks to the work of excellent officials we now expect to double the success rate of major projects, compared with the figures from 2010.”